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With help from Darius Dixon, Erica Martinson, Darren Goode and Andrew Restuccia

WIND PTC GETS LIFELINE: Just under one day after expiring, the wind production tax credit was given new life as it tagged along for the ride on the fiscal cliff package passed by the House 257-167 late last night, now on its way to the president’s desk for signature. The language extends the deadline until the end of 2013 and changes the language to allow any project that has begun construction by that date to qualify for the PTC, rather than just projects operational by the deadline.

“On behalf of all the people working in wind energy manufacturing facilities, their families, and all the communities that benefit, we thank President Obama and all the Members of the House and Senate who had the foresight to extend this successful policy, so wind projects can continue to be developed in 2013 and 2014,” said Denise Bode, the outgoing CEO of the American Wind Energy Association.

ALSO INCLUDED IN THE PACKAGE: The PTC extension applies to several other types of energy, including geothermal and biomass.The package also included a number of energy tax provisions, including investment tax credits for offshore and community wind, biofuel credits and provisions for electric motorcycles and energy efficient homes and appliances.

QUOTABLE: In remarks delivered after the House passed the bill, President Barack Obama gave several shout outs to energy. “Companies will continue to receive tax credits for the research that they do, the investments they make, and the clean energy jobs that they create,” he said, adding later: “We can settle this debate, or at the very least, not allow it to be so all-consuming all the time that it stops us from meeting a host of other challenges that we face: creating jobs, boosting incomes, fixing our infrastructure, fixing our immigration system, protecting our planet from the harmful effects of climate change, boosting domestic energy production, protecting our kids from the horrors of gun violence.”

HOW THEY VOTED: Fred Upton, Henry Waxman, Doc Hastings and Ed Markey all voted for the measure.

WHAT COMES NEXT: With the PTC renewed for a short time, all eyes now turn to the tax reform effort many lawmakers have promised to take up in the next Congress. The wind industry had been pushing a short-term extension followed by a phase-out plan that would cut the credit completely by 2019, which AWEA said would give wind power the time it needs to bring prices down further and compete with other sources of power.

IT’S OFFICIAL — JACKSON LEAVING EPA: EPA chief Lisa Jackson announced during the break that she’ll be leaving her post sometime after the State of the Union. Under Jackson, EPA made the critical determination that greenhouse gases threaten public health and the environment, paving the way for first-ever rules to deal with global warming, and pushed through stringent new toxic air pollution standards for power plants. But Jackson ran into opposition from the White House in her push to set new smog standards, nearly quitting over the decision to punt tougher limits until after the election. Darren Samuelsohn and Erica Martinson have more: http://politi.co/W6XnHD

WHAT SHE’S NOT DOING: Jackson is so far mum on future plans, but she told the Star-Ledger that she’s not looking to run for governor of her native New Jersey: http://bit.ly/U3D9QD

BUT WHY IS SHE REALLY LEAVING? Jackson’s departure has been widely expected for many months, particularly following years of battles with Republicans and industry — not to mention some tensions with the White House. But that isn’t stopping speculation, including Sen. David Vitter’s statement that a recent flap over Jackson’s secondary “Richard Windsor” email account (Erica’s written about it here: http://politi.co/Q8Z5dX) ”clearly spurred” Jackson’s resignation. “But it's much broader than her,” the Louisiana Republican added. “It's about a culture of hiding an extreme agenda from Americans because it can't be sustained in public debate. I'll fight aggressively to end these practices, which I fear are very widespread.”

CAUTION — NOMINATION BATTLE AHEAD: Plenty of senators, including Vitter, have shown a willingness to block even favored EPA political appointees in the past. It’s likely someone will put a hold on the administration’s nomination to replace Jackson, meaning Democrats will have to pull votes from across the aisle to break the 60-vote cloture barrier. “During the last four years of her leadership the EPA has played a negative role in stifling our economy,” Vitter, the incoming ranking member on Environment and Public Works, told POLITICO. “Moving forward I’ll be working with my colleagues in the Senate to make sure the new nominee is thoroughly vetted, puts sound scientific standards above political ideology and understands that EPA’s avalanche of regulations can crush the growth of American businesses.”

— Bob Perciasepe, deputy administrator, will step in as the acting EPA administrator when Jackson leaves at the State of the Union, until someone (possibly himself) is confirmed by the Senate.

How long can the acting administrator stay in place? That’s dictated by the Vacancies Reform Act, which allows Perciasepe to serve 210 days before the president even submits a nomination. Once there’s a nomination on the table, the acting can stay in place until the Senate takes action or the nomination is withdrawn. If the Senate rejects a nomination or the president withdraws it, another 210-day period begins. If a second nomination is rejected, returned, or withdrawn, then the third — and last — 210 day period begins. So the EPA could theoretically operate with an acting administrator for Obama’s entire second term. (h/t to the EPA press office for tracking down that information for ME.)

MARKEY TO RUN FOR SENATE: Rep. Ed Markey (D-Mass.), the ranking Natural Resources Committee Democrat, will run for his state’s open Senate seat (left by John Kerry’s nomination as Secretary of State). With the special election slated for later this year, it’s a safe race for Markey, who could keep his House seat if he loses out for statewide office. State and national Democrats quickly threw their support behind Markey. Emily Schultheis had more, ICYMI: http://politi.co/YUVjJ8

GAS PRICES — THE BAD NEWS: As expected, 2012 gas prices broke records — including the most expensive annual average yet, $3.60 a gallon over the last year, according to AAA. That’s up nine cents from the previous high, 2011’s $3.51 a gallon. AAA blames it on several factors, including hurricane disruptions, refinery outages and Middle East tension. Hawaiians paid the most in 2012, an average of $4.31 a gallon, followed by Alaska’s $4.09 a gallon and California’s $4.03 a gallon.

THE GOOD NEWS: AAA predicts gas prices in 2013 will still be high, but not as high as in 2012, due to increased domestic oil production and decreased demand. The group also noted that, in the event Congress doesn’t solve the fiscal cliff and the economy is pushed back into a recession, gas prices would likely plummet — although that’s not really an effective way to lower gasoline prices.

HAPPY 2013 and welcome to Morning Energy, where we’ve resolved to finally sit down and write the Next Great American Novel… or at least some good “Star Trek” fanfic. Send your energy news to aguillen@politico.com, and resolve to follow the whole Pro Energy team on Twitter if you don’t already: http://bit.ly/Qad8Rb

** A message from America’s Natural Gas Alliance: When used to generate electricity, natural gas burns cleaner than other fuel sources, with less pollutants and no mercury. Learn more about this abundant, American resource: http://bit.ly/d652Uo **

2013’S TOP 10 ENERGY QUESTIONS

1) Should they stay or will they go now? A number of Cabinet members and agency heads are likely on the way out, maybe in the next few weeks, maybe later this year. Already on that list is EPA chief Lisa Jackson and NOAA chief Jane Lubchenco, and seeming likely to join it is Energy Secretary Steven Chu, Interior Secretary Ken Salazar and White House Council on Environmental Quality Chair Nancy Sutley. Who will replace them, and the many other officials and staffers that may depart? Will top Obama energy adviser Heather Zichal stick around the West Wing? NRC Chairwoman Allison Macfarlane was confirmed to fill out the rest of Gregory Jaczko’s term; can she survive a re-appointment to a full term this summer? Sen. John Kerry has been nominated as Secretary of State. Will he prove as attentive to climate change as many greens hope?

2) Will anyone take serious action on climate change? Will the widespread drought of 2013 or the devastating effects of Hurricane Sandy translate into legislative action, perhaps shifting attention to climate change preparation and mitigation? The Obama administration has touted improved fuel economy standards and its support for clean energy deployment and development as contributing to emissions reductions. Will the White House move forward voluntarily on Clean Air Act greenhouse gas regulations for the power industry? Oil and gas? Or will they hold off as long as legally possible? Meanwhile, U.S. interest and involvement in international climate talks have steadily declined since 2009’s Copenhagen meeting. But the negotiations could start heating up as diplomats begin hammering out a new emissions deal by 2015 to take effect in 2020. Will the U.S. engage more with the UN process?

3) What’s coming from EPA? Perhaps the number one most-anticipated item is limits on greenhouse gas emissions from new power plants, which the agency is due to finalize in the first quarter of 2013. Critics of the rule say it essentially bans building any new coal plant. Will it hold up in court? Will EPA move on regulations for existing power plants? Opponents to such a rule say it would be the end of coal and an economic disaster. Greens say not moving on climate change will be its own kind of economic disaster. This year EPA will defend its first-term Mercury and Air Toxics Standards for power plants in court — will the rule hold up? The agency will also have to spend the year dealing with a federal appeals court’s 2012 decision to toss the cross-state rule. Will the agency have to rewrite the whole thing? How long will it take, and how much will the agency have to change? It also remains to be seen whether the agency will ever finalize regulations designating coal ash as a hazardous waste — the rule has been shelved for years now, but recent court action by environmentalists could force the agency into a decision. This summer folks can also be on the look-out for long-awaited regulations water discharges from cooling towers.

4) Will Keystone XL get approved? Obama’s approval or rejection of the pipeline is a real will-he-or-won’t-he question — one that savvy ME readers will remember also made last year’s list of questions. Since Obama’s rejection of the pipeline early in 2012 — a move he pinned on a short, congressionally mandated deadline — pipeline opponents have had plenty to worry about. Topping the list: the president’s full-throated embrace of the southern portion of the pipeline to carry crude from Oklahoma to Texas. With a new route through Nebraska firming up and pressure from Democrats like Montana’s Max Baucus and the U.S.’s friends to the north, will Keystone XL cross the border or won’t it?

5) What will happen to energy tax provisions if Congress takes up a massive tax reform effort? With the PTC now given a lifeline, the industry is under pressure to stick to the phase-out plan officials say will keep the industry competitive until it can stand on its own two feet. Can they convince lawmakers seeking tax reform to include their phase-out in any plan? Meanwhile, will President Obama keep his longtime promise to take down billions of dollars’ worth of oil tax provisions? What about other potential ideas, including opening up master limited partnerships to renewable energy projects, implementing a national clean energy standard or the highly controversial carbon tax?

6) What’s going to happen with natural gas? Will it remain a cheap source of energy? Will DOE give the green light to the various natural gas export applications currently pending? Could increased exports raise U.S. prices? What’s going to happen to fracking regulations — on the federal level, and on the state level, especially in New York, which is still mulling a ban on the practice? Is this the year natural gas vehicles take off?

7) What to do with nuclear waste? Even though a federal appeals court is likely to force the NRC to continue its technical study of the Yucca Mountain site, the project's supporters have hit a judicial dead end in their quest to resurrect it. Work on the nuclear waste issue between Sens. Jeff Bingaman and Lisa Murkowski of the Energy and Natural Resources Committee and top Senate energy appropriators Dianne Feinstein and Lamar Alexander to codify recommendations from the Blue Ribbon Commission stalled out last year. But with Bingaman departing, can incoming ENR Chairman Ron Wyden and his colleagues really come up with comprehensive waste legislation palatable to Senate Majority Leader Harry Reid?

8)Will drilling in the Arctic move forward? Shell came close in 2012 as the company started preliminary drilling activities off the coast of Alaska. However, the company was forced to delay serious extraction until at least this year amid containment equipment issues and encroaching cold temperatures. Environmental activists were heartened by the delay. But greens may not find a friend in the Oval Office on this issue following a May New York Times article (http://nyti.ms/LRMhow) detailing President Obama’s “preoccupation” with drilling in the Arctic’s shallower waters. Will this be Shell’s year up north? Or will issues like a lack of response capacity from emergency agencies gum up the works?

9) Whither coal? The “war on coal” became a commonly used phrase in battleground states such as Colorado, Ohio and Virginia, but the campaign didn’t seem to have the effect coal backers were looking for as Obama swept those states and down-ticket Democrats were largely reelected to office. While the industry points to federal regulations (see #3 on this list) as major contributors to the drop of coal’s share of the nation’s electricity, cheap natural gas has proven to be just as much — or even more — of an issue for coal. Will natural gas continue to pummel coal in 2013? And will foreign demand for coal boost U.S. exports of the stuff?

10) Will Congress make any progress on energy efficiency, perhaps the energy issue that has best been able to harness the power of bipartisanship? Congress passed several energy efficiency measures last year, including one during the fiscal cliff drama that incorporated some elements of the long-suffering Shaheen-Portman energy efficiency legislation. Will the rest of that legislation see the light of day?

WANT MORE? Darren Goode takes a closer look for Pros at what Congress might be able to tackle over the next two years in areas such as energy efficiency, natural gas, revenue sharing and cybersecurity: http://politico.pro/UELrzx

SHELL RIG RUNS AGROUND IN ALASKA: From The New York Times: “One of Shell Oil’s two Arctic drilling rigs is beached on an island in the Gulf of Alaska, threatening environmental damage from a fuel spill and calling into question Shell’s plans to resume drilling in the treacherous waters north of Alaska in the summer. The rig, the Kulluk, broke free from a tow ship in stormy seas and ran aground Monday night. The Coast Guard was leading an effort to keep its more than 150,000 gallons of diesel fuel and lubricants from spilling onto the rocky shoreline.” NYT: http://nyti.ms/ZTbeZV

COMMENTS TO NRC ON WASTE STORAGE RULES DUE: The public comment period on how the NRC should tailor environmental assessments in devising its new nuclear waste storage rules is ending today, and the suggestions are piling up. Keith McConnell, the chief of the agency’s Waste Confidence Directorate, said the NRC has received more than 400 comments and suggestions by New Years’ Eve. But in addition to the “hundreds of thoughtful comments,” the agency received complaints about the “scoping” process itself, the Jan. 2 deadline, and the wording of the original public comment notice. The NRC is hoping to develop a draft environmental impact statement and proposed rule on waste storage by August. http://1.usa.gov/Z949Dj

AFPM PETITIONS EPA FOR CELLULOSIC MANDATE WAIVER: The American Fuel & Petrochemical Manufacturers on Monday petitioned EPA for a waiver on the 2012 cellulosic biofuel mandate, an ongoing bone of contention between industry and the agency. Industry groups say a lack of commercial availability means the RFS is requiring them to purchase fuel that doesn’t exist; an unrelated lawsuit over the mandate is currently wending its way through courts. “Why should obligated parties have to purchase waiver credits for fuel that was not produced when the program authorizing statute created waiver authority for such situations?” the petition says: http://politico.pro/WZXfMj

WITH THEIR POWERS COMBINED: Looks like energy isn’t the only area Ron Wyden and Lisa Murkowski plan to team up on. In a Dec. 27 Washington Post editorial, the Energy and Natural Resources Committee leaders outline their plan for campaign finance reform. The op-ed: http://wapo.st/12Sq2FU. An outline of the proposal: http://1.usa.gov/W9mdXb

QUICK HITS

— U.S. District Judge Carl Barbier has given final approval to BP's $7.8 billion settlement "to resolve economic and medical claims from more than 100,000 businesses and individuals,” the AP writes: http://abcn.ws/XWOfGJ

** A message from America's Natural Gas Alliance: We believe in a clean energy future. Natural gas is a cleaner energy choice and a key partner to solar and wind technologies. From California to Florida, natural gas facilities are working with renewable energy to ensure steady, affordable and cleaner energy choices for communities across our nation. Because it is an abundant and affordable energy source available right here in America, natural gas can help make the promise of cleaner energy a reality in more American communities. Natural gas is smarter power today. Visit anga.us to learn more. **